The federal government has made it less expensive to remodel via the American Recovery and Reinvestment Act of 2009. Granted, the savings come in the form of tax credits, but in the end its real money. To be eligible for the tax credits, remodeling needs to fall under one of three types of home improvements.

First: Home-shell improvements are eligible (insulation, caulking, windows, etc..).

Second: Heating, ventilation and air conditioning improvements (using more efficient newer models of course) are eligible as well.

Third, renewable energy technology is also available for tax credits. Example of items that fall in this category would be geothermal heat pumps, solar water heating, solar panels, and even wind generators. This category tends to be the more expensive of the three, but also has a longer time frame in which to qualify. While the other two categories purchases have to be made before Dec. 31, 2010, investments in renewable energy are eligible for credit through Dec. 31, 2016.

The American Recovery and Reinvestment Act of 2009 increased the credit from 10% to 30% of the cost of energy efficient windows, HVAC equipment and insulation, up to $1,500. Unfortunately, the $1500 is the maximum amount that can be credited, even if you do multiple qualifying improvements on your home. This credit also only applies to the cost of the components, not installation, with the exception of energy equipment installation.

The bar has also been raised for what will qualify for a credit. For example, just because a window is Energy Star rated, does not necessarily mean it will qualify for a credit. As to be expected from any government program, there are a lot of rules and regulations, but is definitely worth looking into further for an extra $1,500. Who wouldn’t like to have an extra $1,500 to add to their remodeling budget?

~ Russell Ives